Friday Rant: Is There a Danger Behind Spend, Supplier and P2P Solution Mash-ups?

I'm not sure if all Spend Matters readers are familiar with the phrase "mash-up." To make sure we're all on the same virtual page before getting into the crux of this post, Wikipedia defines a mash-up as a "web page or application that uses and combines data, presentation or functionality from two or more sources to create new services ... The term implies easy, fast integration, frequently using open APIs and data sources to produce enriched results that were not necessarily the original reason for producing the raw source data."

I'm going to use mash-up in this post in a slightly different manner, just as Ariba has twisted around the use of cloud computing for its own marketing. But no bother -- if they can get away with such moves, so can we. In my use of the word mash-up for the context of this post, I'm referring to the merging of functionality from what used to be separate solution areas (e.g., spend analysis, supplier information management, eProcurement, electronic invoice presentment payment (EIPP), etc.) into integrated solutions.

Earlier in the week, I gave the example of Lavante (Part One and Part Two), which has combined capability from specialized spend analysis, audit recovery and supplier information management capabilities into a hybrid solution that accomplishes elements -- in some cases fully, in come cases partially -- of all three areas. On some levels, you might say Ariba has done the same thing with the combination of their P2P solution and network, merging the three often separate and loosely coupled worlds of eProcurement, invoice management and network operating enablement.

In the future, I highly suspect we'll see more mash-ups such as these that combine different modular areas. In fact, this is what SAP has done recently by extending the capabilities of its E-Sourcing capability into supplier information management. Others have done this with e-sourcing and basic contract management capability as well (e.g., Zycus, Iasta, SAP). We've even seen this with specialist providers, like Trade Extensions introducing limited elements of spend analysis (especially data acquisition/ETL) as an extension of its optimization capabilities.

But I'm not yet convinced that in the march to bring more diverse elements together into a single solution (or a single solution with inexpensive bolt-ons) that we'll necessarily optimize for the whole. On many levels, spend analysis and supplier information management seem like a natural fit for each other. Yet the nuances of Spend Management modular areas, when provided by best of breed providers, can often enable a different level of capability in certain areas (e.g., the ability to add new and different data sets or to easily classify multiple taxonomies for spend analysis) or other advantages (e.g., lesser network fees, greater payables control, complete working capital visibility for invoice management).

Perhaps the ultimate promise of the cloud -- whatever the cloud really is -- will be to enable seamless multi-vendor SaaS to SaaS (as well as multi-vendor SaaS to installed) integration. This would bring the true power of best-of-breed mash-ups together, ideally in the context of a single interface and user-facing application. The only example I can think of today in this context is Rearden Commerce, which has done a remarkable job doing just this, albeit in only a handful of niche areas.